The Proposed European Blue Card System: Arming for the Global War for Talent?

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The Proposed European Blue Card System: Arming for the Global War for Talent?

January 7, 2008

By Elizabeth Collett

In October, the European Union unveiled its proposals for a Blue Card system with a flourish.

Comparable in theory to the U.S. green card, which grants lawful permanent residence based on employment in addition to family relationships or refugee/asylee status, this legislation aims to make Europe a player on the emerging global labor market, enhancing its competitiveness and luring highly skilled workers to Europe — and away from countries like the United States and Australia.

The scheme is based on the rationale that Europe is stronger when it works together to attract skilled workers than as individual Member States. Comparisons are often made with North America. The European Commission itself noted in a memo that, while nonnational highly skilled workers make up 3 percent of the labor force in the United States and 7 percent in Canada, highly skilled non-Europeans form just 1.7 percent of the employed population in Europe.

But there are disparities between EU Member States. While tertiary-educated migrants form nearly half the employed foreign-born population in countries such as Belgium, Luxembourg, Ireland, and Sweden, they are a far smaller proportion in southern European countries, such as Greece and Italy according to a report from the Organization for Economic Cooperation and Development (OECD).

In theory, a Blue Card system would aim to reduce these differences, and increase Europe's attractiveness as a whole.

The Proposal Itself

The central tenet of this proposal is the enhanced freedom to access labor markets that comes with Blue Card status.

Though restricted for the first two years, after this probationary period, Blue Card holders may seek and gain employment in any other Member State without going through further immigration processes. This is intended to promote flexible circulation of labor for European countries, as well as to provide an additional attraction to skilled workers.

In addition, the proposal has a number of innovative aspects. For example, the Blue Card would have a three-month "grace" period if employment is lost, and would allow immediate family reunification and the right to work for spouses.

Blue Card holders would be treated equally in relation to national workers, limited only in their access to study grants, housing, and social assistance. Also, individuals under age 30 would face lower hurdles in qualifying for Blue Card status, recognizing the need to attract young talent to Europe.

Guarding the Labor Market

The current institutional context for building common EU immigration policies means Member States retain firm control over who enters their countries. As a result, the proposal contains a number of safeguards, which in turn raise questions as to how much value the Blue Card can offer EU labor markets or the migrants applying for the card.

First, the proposed system does not replace the 27 immigration systems of the Member States but merely offers an additional channel of entry via a new common process. This is not harmonization in the traditional EU sense, which seeks to break down barriers and differences between the various national regulatory systems across Europe, as was achieved with the single market, for example.

Second, potential Blue Card candidates would have to secure at least a one-year work contract and meet any national quotas or labor market tests in place before reaching the fast-track procedure. The proposal is far from Commissioner Franco Frattini’s original idea of a "job seekers" permit, which would have allowed highly skilled migrants to enter the EU area and search for work in any of the 27 EU Member States.

Third, instead of replacing current national systems, the legislation would prevent Member States from applying more advantageous rules to attract the highly skilled. This approach does not reflect the reality that European countries increasingly compete with each other.

Fourth, the proposal aims to create a level playing field but may be perceived as constraining those countries already capable of attracting workers, such as the United Kingdom. For them, the Blue Card system offers little.

Unanswered Questions

Beyond labor-market safeguards that may do more harm than good, the proposal raises a number of other questions, not least, "What is highly skilled?" The proposal includes several criteria, including education, experience (in lieu of education), and a minimum salary threshold.

The focus on salary reflects again the difficulties reconciling very different national approaches toward the highly skilled. While some countries see salary as a proxy for skills in demand, or create lists of sectors and jobs where vacancies persist, others take a broader approach, valuing tertiary education. The Blue Card proposal attempts to allow for those needed skills that cannot be obtained through study while setting a financial threshold to minimize abuse of the system.

The proposal says little about the way qualifications from outside Europe might be recognized. Within Europe, recognition of qualifications has been a notoriously difficult process.

Efforts to create a European Higher Education Area by 2010 through the Bologna Process have been ongoing since 1999, and they include all Member States and a number of neighboring states from Iceland to Azerbaijan. This system of equivalization should mean that an engineer qualified in France may work in the Czech Republic without undergoing additional training.

Many EU countries lack sufficient legal frameworks for recognizing qualifications from outside the European Union, and there is no common EU framework for determining qualifications earned in third countries. Consequently, a degree that one Member State recognizes as qualifying for a Blue Card may be rejected by another Member State. Such differing national standards may cause friction once Blue Card holders have the right to move across the continent.

For many countries outside Europe, the difficulties are compounded. In the absence of national educational authorities in third countries that can vouch for qualifications, verification and equivalence is hard to determine.

The recommended wage threshold for the Blue Card is three times the national minimum wage. However, the minimum wage varies hugely across EU Member States, another factor that could cause friction between countries with respect to determining entry.

Member States are also free to set their own minimum salary threshold for Blue Card qualification. This may well allow them to "opt out" of the legislation by setting unfeasibly high thresholds.

Germany's current immigration policy for the highly skilled sets a minimum annual salary threshold for desperately needed IT workers at 85,000 euros. Despite vocal lobbying by German businesses, which would like to see the threshold lowered substantially, the government refuses to do so, in an effort to prioritize domestic workers.

The combination of wage disparities across Europe and the freedom to set national threshold levels sets the stage for intra-EU competition for Blue Card workers. Highly skilled workers could be lured away by higher wages in other EU countries once their probationary period is over, while businesses could focus on poaching Blue Card workers when restricted by national policies.

Structural Barriers to Mobility

These disparities raise a deeper issue the Blue Card proposal does not address: structural barriers to mobility, such as portable social security contributions, including pension schemes. These barriers, which currently affect EU nationals, would also affect third-country nationals entering on Blue Cards.

Labor mobility in the United States is much higher than within the European Union, despite the freedom of movement for EU citizens, and, while the comparison is unfair, it highlights the work the European Union has to do in order to compete with such flexible opportunities overseas.

Differences in taxation, labor markets, salaries, and adequate recognition of skills (not just qualifications) all play a role in a migrant's decision to move to a European country. Further, issues such as the portability of social security contributions, mentioned above, and access to services in the host country could feed into the decision-making process.

The European Union is beginning to build strategies in many of these areas but, critically, they occur within a separate portfolio, that of Employment and Social Affairs, while the Blue Card proposal comes from the Justice, Liberty and Security Directorate General. While Commissioner Frattini has created a Task Force on Migration, bringing together the commissioners from six Directorate-Generals, the separate priorities, and the legal bases that exist in each policy area make deep cooperation difficult.

National Approaches

Following several initial discussions of the Blue Card scheme, most recently during a joint meeting of the ministers for immigration and employment from the Member States, a number of European countries expressed doubts that the European Union could help them become more competitive.

At the joint meeting, Germany argued that its level of unemployment means that skills can still be sourced domestically. At the same time, the immigration minister emphasized that — on principle — determinations of economic migration are purely a national matter.

Other countries do not see the need for the legislation at a time when they are developing their own Blue Card-type systems.

The United Kingdom, for example, is already far ahead of the EU average in attracting the brightest and best, and its new points system aims at enhancing that ability even further. Under this system, which the government will roll out in stages beginning in early 2008, those who reach a threshold of 75 points, based primarily on their age, qualifications, salary, and English proficiency, will be able to come to the United Kingdom to look for work.

Thanks to newly elected President Nicolas Sarkozy, who instituted immigration policy changes while still interior minister, France is moving toward an overt scheme of "selective immigration." This means recruiting highly skilled workers while limiting family reunification and rights of residency for other entrants. Based on sectoral and geographical recruitment needs, those selected for their "skills and talents" will be offered three-year resident permits.

Some countries have disputed the Blue Card scheme on principle. Ministers from the newer Member States, notably the Czech Republic, feel that a common migration system for the highly skilled is inappropriate when transitional arrangements limiting the labor mobility of EU citizens from the new Member States are still in place.

Finally, some countries have expressed concern that such a scheme would exacerbate the problem of brain drain from the African continent.

Interestingly, the proposal has caught the attention of non-European competitors in the race for talent. Numerous media reports from Australia and the United States reveal the concern that Europe might be about to move up the ranks in the global competition for workers. Indeed, Craig Barrett, the chairman of Intel, believes the EU initiative reflects political courage lacking in the United States.

Are the Member States right to be so cautious and on so many grounds? At root, their reluctance is based on general suspicion of efforts to create any common immigration policies in Europe.

Legislation to harmonize economic migration, particularly of the low skilled, has been difficult to approach at the European level, and the Blue Card proposal reflects the continuing tension between national sovereignty and European integration.

As an instrument of harmonization, however, it is also arguable that the Blue Card proposal has been overestimated both by those fearing new EU power consolidation and those who want to improve Europe's ability to attract high-quality workers.

Creating Opportunities

To what degree do immigration policies affect the attractiveness of a country or continent? Surveys of highly skilled migrant workers in a variety of sectors suggest that immigration policies per se are not their primary concern.

Rather, the quality of the opportunity offered — whether a high salary, career advancement, or the chance to work with leaders in the field — plays a dominant role in pulling migrants to a country.

Government efforts to foster the creation of centers of excellence, both in business and academic terms, can help ensure the future success and competitiveness of Europe. Centers of excellence would not just improve the European Union's chances of winning the global battle for talent, but they could play a role in expanding the pool of homegrown talent.

The European Union is establishing a European Institute for Innovation and Technology to stimulate the creation of innovation and knowledge within Europe. Initiatives like this, combined with flexible, open policies towards the highly skilled, may have a greater long-term impact than EU measures that have to protect national immigration and labor market policies.

Sources

Ackers, L. 2005. Moving People and Knowledge: Scientific Mobility in the European Union, International Migration, Vol 43(5);

European Commission. 2007. Attractive conditions for the admission and residence of highly qualified immigrants. MEMO/07/423. October 23.

European Commission. 2007. Proposal for a COUNCIL DIRECTIVE on the conditions of entry and residence of third-country nationals for the purposes of highly qualified employment. COM (2007) 637. October 23.

Home Office Border and Immigration Agency. Information about the Highly Skilled Migrant Programme. Available online.